Canada-Newfoundland and Labrador AgriInsurance Agreement. Producer Handbook. Vegetable Insurance 2016 Crop Year

Transcription

1 Canada-Newfoundland and Labrador AgriInsurance Agreement Producer Handbook Vegetable Insurance 2016 Crop Year

2 Contents 1.0 PROGRAM OVERVIEW LEVEL OF COVERAGE , 70, or 80 percent Market Price or Cost of Production CROP DEADLINES RESPONSIBILITIES OF PARTIES April May June July August September October November December Crop Rotation RESEEDING BENEFITS/ PERMISSION TO ABANDON Re-seeding Benefit Permission to Abandon CALCULATIONS Premium Rates Individual Probable Yields & Provincial Probable Yield Benchmark Production Guarantee Price Option Coverage Value Total Premium Premium Discount/Surcharge Revised Premium Cost Share Arrangements for Premiums Actual Marketable Yield Indemnity in the Event of a Loss TEST PLOTS

3 8.1 Methodology Used to Place Markers Significance of Test Plots Remaining Unharvested Harvesting of Test Plots Offsetting Production CLAIM PROCESS APPEAL PROCESS INSURABLE CROPS Potato Eligibility Certified Seed Perils Blight Crop Year Planting and Harvesting Dates Storage Inspection Deadline Coverage Premiums Potato Grade Standards Rutabaga Eligibility Perils Clubroot Crop Year Planting and Harvesting Dates Storage Inspection Deadline Coverage Premiums Rutabaga Grade Standards Cabbage Eligibility Perils Clubroot Crop Year Planting and Harvesting Dates Storage and Inspection Deadline

4 Coverage Premiums Cabbage Grade Standards Carrot Eligibility Perils Crop Year Planting and Harvesting Dates Storage Inspection Dates Coverage Premiums Carrot Grade Standards Beet Eligibility Perils Crop Year Planting and Harvesting Dates Storage Inspection Deadline Coverage Premiums Beet Grade Standards Parsnip Eligibility Perils Crop Year Planting and Harvesting Dates Storage Inspection Deadline Coverage Premiums Parsnip Grade Standards MINIMUM CROP ROTATION REQUIREMENTS

5 1.0 PROGRAM OVERVIEW The Canada - Newfoundland and Labrador AgriInsurance Program is funded by GROWING FORWARD 2: A FEDERAL - PROVINCIAL - TERRITORIAL FRAMEWORK AGREEMENT ON AGRICULTURE, AGRI-FOOD, AND AGRI-BASED PRODUCTS POLICY. The objective of this handbook is to outline the roles and obligations of both the Newfoundland and Labrador Crop Insurance Agency and the insured producer. There are several resources, associated with the AgriInsurance Program, which can be used in conjunction with this handbook to assist the producer throughout the growing season. These documents offer detailed specifications and contractual obligations for the producer and include; Newfoundland and Labrador Crop Insurance Act, Canada - Newfoundland and Labrador AgriInsurance Contract, Please note that the AgriInsurance contract supersedes any information contained within this Producer Handbook. All vegetable producers, regardless of tenure of land, with one or more acres of the desired crops are eligible to make an application for insurance under this plan. There has been a significant change to the eligibility requirements of the program since Previously, the program required a minimum of one (1) acre of a particular insurable crop to be eligible for insurance but as of the 2015 crop year the minimum per crop is now ½ acre of each crop with a minimum requirement of 1 acre per farm (e.g., ½ acre of potato and ½ acre of cabbage; a total of 1 acre for the farm is eligible for insurance). All fields of a particular crop must be insured, not just the high risk areas. Premiums are cost-shared between the Federal and Provincial governments and producers. Producers can purchase coverage at levels of 60, 70 or 80 percent of their individual average yield. The cost sharing breakdown is described in greater detail in Section 6.9. The following vegetable crops are designated as insurable crops under the Newfoundland and Labrador AgriInsurance Program: Beet Cabbage Carrot (Grown on mineral or peat soil) 5

6 Parsnip Potato (Grown from certified class seed or better; locally grown certified seed as well as imported certified seed are eligible - EXCLUSION: Russet Burbank is not eligible for coverage) Rutabaga AgriInsurance offers financial protection against crop losses due to uncontrollable, natural, insurable perils. The following are designated as perils for the purposes of insurance plans relating to designated crops; drought, excessive moisture, excessive rainfall, flood, frost, insect infestation, plant disease, wind, hail, snow, wildlife, and any other condition beyond the control of the insured person which results in the loss of a crop or part thereof. The final determination of an uncontrollable natural peril is at the discretion of the Agency. However no indemnity shall be given or paid in respect of or resulting from: any area that, in the opinion of the Agency, is not properly prepared by the insured person for seeding or planting (eg. excessive stone, rock or weeds); loss of crop from insect infestation, plant disease or excessive weeds where the insured person fails to implement any program, including crop rotation plans, recommended by the Forest Resources and Agrifoods Agency in a timely manner for the control of same; the negligence or misconduct of, or application of poor farming practices or standards, by the insured person or employees of the insured person; a shortage of labour or machinery or misapplication or improper use of labour, machinery, fertilizer or pesticides by the insured person; failure by the insured person to adhere to planting/harvesting dates as outlined in the Newfoundland and Labrador AgriInsurance Contract; and crop loss due to adverse conditions as a result of a field situated on a flood plain Under the contract no indemnity shall apply or be paid unless: the total area planted is harvested, or 6

7 the consent of the Agency is obtained in writing for the abandonment or destruction of the crop or any part of it, or the use of the area planted or any part of it for another purpose, or the total area or any part of it is unable to be harvested by reason of destruction by a designated peril as defined, or the insured person notifies the Agency of any crop loss or damage by a designated peril within 5 days of the damage becoming apparent and on or before the set deadlines, or the insured person s premiums and/or outstanding payments are paid in full The Agency reserves the right to accept or reject AgriInsurance applications from producers. Producers who have submitted applications and are deemed ineligible for AgriInsurance will be notified within 60 days of the application deadline that coverage has been denied. 2.0 LEVEL OF COVERAGE , 70, or 80 percent Insurance coverage is available to eligible producers on vegetable crops insured by the Newfoundland and Labrador Crop Insurance Agency. Producers choose the level of coverage - 60, 70, or 80 percent levels when they submit their applications to enroll on the insurance program. Applications for coverage are subject to approval by the Agency. The choice of coverage level determines the amount of the individual s probable yield that will be guaranteed or insured. 2.2 Market Price or Cost of Production There are two unit price options available to insured producers. The first option is the pre-harvest Cost of Production price and the second option is a Market Price. Cost of Production (COP) studies are performed internally within the Forest Resources and Agrifoods Agency for Newfoundland and Labrador producers. These studies use data which was collected originally in 1997 and revised in The COP unit price is determined by summing all pre-harvest field expenses (including seed, fertilizer, limestone, pesticides, gas, oil, repairs, hired labour, greenhouse costs and interest payments on working capital) and dividing the total by the average yield per acre. 7

8 The Market Price (MP) is determined by taking 70 percent of the simple five year moving average of the average farm price as determined by Statistics Canada. These figures can be found in Fruit and Vegetable Production, Statistics Canada Cat CROP DEADLINES Crops will not be insured if they are planted prior to May 1 in any year. Table 3.1 below lists planting and harvest deadlines. Table 3.1 Crop Deadlines DEADLINE Crop Planting / Seeding / Reseeding Harvesting Storage Inspection Potato June 30, 2016 October 31, 2016 Rutabaga July 5, 2016 November 10, 2016 Four weeks after Harvesting Deadline Four weeks after Harvesting Deadline Cabbage- Transplants June 30, 2016 Refer to Variety Four weeks after Harvesting Deadline Cabbage- Seed (early season) June 30, 2016 October 1, 2016 (Not Applicable) Cabbage- Seed (mid season) Cabbage- Seed (late season) June 5, 2016 October 31, 2016 June 5, 2016 November 15, 2016 Four weeks after Harvesting Deadline Four weeks after Harvesting Deadline Carrot June 20, 2016 October 31, 2016 Beet June 20, 2016 October 31, 2016 Parsnip June 20, 2016 October 31, 2016 Four weeks after Harvesting Deadline Four weeks after Harvesting Deadline Four weeks after Harvesting Deadline The harvesting deadline may be imposed earlier than stated below if the Agency determines that the crop is mature and at risk from one or more insurable perils. Storage inspections may be conducted up to four weeks after the harvesting deadline if the storage losses are related to field problems identified throughout the season. 8

9 Crops must be stored in climatically controlled facilities. Losses due to inadequate storage facilities are not eligible for indemnity payments. Planting, reseeding, harvesting and storage inspection dates have been set forth by the Crop Insurance Agency. In situations where poor weather delays planting or harvesting, extensions may be available at the discretion of the Agency upon written request from the insured producer and approval by Federal authorities. The written request must be received by the Agency office in Corner Brook at least 5 working days before the deadline listed in the above table. A request will only be considered by the Agency if extenuating weather conditions can be demonstrated in the producer s geographic region. 4.0 RESPONSIBILITIES OF PARTIES In general, producers are responsible for the following: Keep invoices related to fertilizer, pesticides and other inputs for all crops in the event that the insured producer files a claim. The Agency has the discretion to verify such invoices before approval is granted. Grant the Agricultural Inspectors permission to access insured fields at any time in order to properly carry out duties related to the insurance program with or without the presence of the producer. This may include the collection of soil and plant tissue samples for diagnostic analysis. Take soil samples and have them tested in a timely manner for fertilizer and limestone recommendations. Failure to adhere to these responsibilities may result in termination of the contract for Insurance and/or denial of any indemnity claim at the discretion of the Agency. 4.1 April Agency Mail-out of the AgriInsurance application package. Producer Should have received the AgriInsurance application package. Application for AgriInsurance must be completed, signed, and received at the Corner Brook office by April 30. Producers should check with the Corner Brook office before April 30 to ensure their applications have been received. Late applications will not be accepted. The producer must indicate the desired coverage and price option at the time of application. 9

10 The producer must also indicate the drill width for crops included in the insurance application. 4.2 May Agency The Agency will review any claims for reseeding benefits and complete onfarm inspections of fields to ensure proper seedbed preparation. Producer Submit at the beginning of the crop year all potato seed tags to verify certification of the planted crop. Must notify the Agency if there is any significant crop damage. 4.3 June Agency On-farm inspections of fields to ensure proper seedbed preparation. The Agricultural Inspector completes the GIS Mapping of the seeded area. Test Plots are placed in the insured fields - these plots must be left in the field until harvested by the Agricultural Inspector (see Section 7.0 for more information). The Agency will review any claims for reseeding benefits. The Agricultural Inspectors will distribute Producer Handbooks and Contracts of Insurance to producers who applied. Agricultural Inspectors will follow-up, with an inspection, any Notice of Crop Loss and Request for Inspection as indicated by the producer. The Agency will review applications for insurance and notify producers if insurance coverage has been denied. Producer Must notify the Agency if there is any significant crop damage. Planting / Seeding Deadlines: o June 5 Late and Mid-Season Cabbage o June 20 Carrot, Beet and Parsnip o June 30 Potato, Early Cabbage and Cabbage Transplants 4.4 July Agency The Agency will review any claims for reseeding benefits. Acreage information is forwarded to head office for completion of Schedule D of the Insurance Contract. 10

11 Signed Contracts of Insurance are due at the Corner Brook office by July 31. Agricultural Inspectors will follow-up, with an inspection, any Notice of Crop loss and Request for Inspection as indicated by the producer. Producer Must notify the Agency if there is any significant crop damage. Signed Contracts of Insurance are due at the Corner Brook office by July 31. Planting / Seeding Deadlines: o July 5 Rutabaga (seeded acreage and transplants) 4.5 August Agency Inspections are conducted as close to the August 15 deadline for requesting permission to abandon as possible. Schedule D of the insurance contract and an invoice for premiums is sent to the producer following the confirmation of seeded acreage, coverage level and price option. The Agricultural Inspector will begin harvesting test plots on early and midseason crops. The Agricultural Inspector completes the Crop Inspection form, with the producer, to obtain information on control measures for weeds, disease and insects. Agricultural Inspectors will follow-up, with an inspection, any Notice of Crop loss and Request for Inspection as indicated by the producer. Producer Must notify the Agency if there is any significant crop damage. The Agricultural Inspector completes the Crop Inspection form, with the producer, to obtain information on control measures for weeds, disease and insects. Completes and submits the Acreage Report by August 31. If producer feels the original test dig placement is not indicative of the crop yield, they may request a second diagonal with additional test plots placed. The request must be submitted by Aug 31. See section September Agency The Agricultural Inspector will follow-up, with an inspection, any Notice of Crop Damage and Request for Inspection as indicated by the producer. The Agricultural Inspector will continue harvesting test plots on early and mid-season crops. The Agricultural Inspector harvests the test plots when 11

12 the crop reaches maturity. The point at which a crop has reached maturity and requires harvesting is at the sole discretion of the Agricultural Inspector. Producer Must notify the Agency if there is any significant crop damage. 4.7 October Agency The Agricultural Inspector harvests the test plots when the crop reaches a marketable size. The point at which a crop has reached maturity and requires harvesting is at the sole discretion of the Agricultural Inspector. Unless an obvious problem has been detected throughout the season, it is at this point when it will be determined whether or not the producer may be in a claim situation. A final report is completed by the Agricultural Inspector indicating whether or not guaranteed production has been reached. Producer Must notify the Agency if there is any significant crop damage. Premiums must be received at the Corner Brook office by October 31. Harvesting Deadlines: o October 01 o October 31 Early Season Cabbage Beet, Carrot, Mid-Season Cabbage, Parsnip, and Potato 4.8 November Agency The Agricultural Inspector harvests the test plots when the crop reaches a marketable size. The point at which a crop has reached maturity and requires harvesting is at the sole discretion of the Agricultural Inspector. Unless an obvious problem has been detected throughout the season, it is at this point when it will be determined whether or not the producer may be in a claim situation. Agricultural Inspectors will follow-up, with an inspection, any Notice of Crop loss and Request for Inspection as indicated by the producer. Producer Must notify the Agency if there is any significant crop damage in both the field and storage. Harvesting Deadlines: o November 10 Rutabaga o November 15 Late Cabbage 12

13 Storage Inspection Deadlines: o November 28 Beet, Carrot, Mid-Season Cabbage, Parsnip, and Potato 4.9 December Agency The annual general meeting is tentatively scheduled to review and discuss the claims as presented by the Agricultural Inspectors. All field work and supporting documentation must be completed by the Agricultural Inspectors before the claims can be presented. Agricultural Inspectors will follow-up, with an inspection, any Notice of Crop loss and Request for Inspection as indicated by the producer. Producer All field work and supporting documentation must be completed by the producer before the claims can be presented to the Board. Also, the producer must notify the Agricultural Inspector if there are any storage losses associated with field-related problems. Claims will not be reviewed until all paperwork is completed and premiums have been paid in full. Storage Inspection Deadlines: o December 08 Rutabaga o December 13 Late Cabbage 5.0 Crop Rotation Crop rotation is an integral part of the crop production system. The greatest benefit to a good crop rotation is increased yields. A well-planned crop rotation will help with insect and disease control and aid in maintaining or improving soil structure and organic matter levels. Using a variety of crops can reduce weed pressures, spread the workload, protect against soil erosion and reduce risk. Research and experience have proven that a good crop rotation will provide more consistent yields, build soil structure and increase profit potential. ( The Newfoundland and Labrador Crop Insurance Agency requires specific minimum rotations and applies restrictions to those producers who do not follow minimum requirements. Planting of grass/legumes is not required as part of the crop insurance program but it is a good practice. The Crop Insurance Agency implements restrictions to producers with regards to crop rotation practices. Producers who do not demonstrate proper crop rotation 13

14 practices (which are outlined section 12 of the Producer Handbook) are subject to restrictions. The restrictions are in the form of limited coverage. For example, if a producer does not demonstrate adherence to a recommended crop rotation for a crop, the coverage for that crop will be restricted to wildlife and/or weather damage. Loss caused by disease or pest will not be covered - unless it can be shown that the disease/pest problem is not related to improper crop rotation. The Agricultural Inspectors meet with producers before completing crop insurance contracts to determine if the recommended crop rotation is implemented. There may be a three year grace period for new applicants to allow time to implement the required rotations. 6.0 RESEEDING BENEFITS/ PERMISSION TO ABANDON 6.1 Re-seeding Benefit A re-seeding benefit is available to all insured producers. Payment is calculated at the pre-harvest Cost of Production unit price regardless of the price option chosen by the insured when the application was completed. The re-seeding benefit is available if the crop loss occurs, totally or in part, within six weeks after seeding or up to the planting deadline; whichever is earlier. If the crop loss occurs after the planting/re-seeding deadline, the re-seeding benefit is not available (see Permission to Abandon 5.2). The indemnity payable shall be 50% of the insured value (coverage) of the crop at the pre-harvest COP price option. The insured producer and the Agricultural Inspector must complete and submit the following forms to the Agency for its decision: Notice of Crop Damage and Request for Inspection Report on Notice of Crop Damage and Request for Inspection Claim Report Any supporting correspondence from the Crop Specialist or an Agricultural Development Officer within the Agrifoods Development Branch of the Forestry and Agrifoods Agency must also accompany this or any other claim. The producer must submit the form to the Crop Insurance Agency before the deadline dates of planting/re-seeding as outlined on the form and in Section 3.0 of the producer handbook. 6.2 Permission to Abandon If it is too late in the season to avail of the re-seeding benefit, and the insured producer determines that the crop is not salvageable, a request for Permission to 14

15 Abandon the particular field can be submitted to the Agricultural Inspector for the Agency. The producer must submit the Notice of Crop Damage and Request for Inspection form to the Crop Insurance Agency on or before the deadline of August 15. The provincial Crop Specialist and/or the Agricultural Inspector will then inspect the field and submit the recommendation to the Agency for decision. Producers granted permission to abandon fields or parts thereof will be required to plow down these areas within 14 days of receipt of notice to abandon the crop and the Inspector must inspect those fields for confirmation of plow down. A cheque for compensation will be released at the earliest opportunity of the Agency in the event that 100% of the crop has been abandoned. When only a portion of a crop is abandoned, the harvested yield for that area will be recorded as zero in the final calculation for the specified crop in determining the total projected crop harvest at the end of the season. 7.0 CALCULATIONS 7.1 Premium Rates The premium rates are calculated yearly by an actuary at the Production Insurance and Risk Management Division, Agriculture and Agri-Food Canada, Ottawa. The rates are based on the indemnity/premium history provided by the Newfoundland and Labrador Crop Insurance Agency. The rates vary depending on the level of coverage. The premium rate is applied to the value of the crop and determines the cost of the insurance to the insured producer. These rates change yearly and the Table 7.1 (below) is an example of the premium rates for the 2016 crop season. Insurance premiums are tax deductible. 15

16 Table Premium Rates CROP COVERAGE LEVELS 60% 70% 80% Beet 27.60% 29.53% 31.21% Cabbage 15.08% 17.92% 20.89% Carrot-mineral 16.80% 20.23% 23.25% Carrot-peat 34.77% 38.22% 42.58% Parsnip 19.56% 25.90% 30.65% Potato 8.75% 12.97% 17.05% Rutabaga 15.93% 20.39% 24.84% 7.2 Individual Probable Yields & Provincial Probable Yield Benchmark A producer s Individual Probable Yield (IPY) is based on a combination of their individual yields and the provincial average. A producer with less than 25 years will have their average calculated using a combination of provincial average and individual average as they build their own history. A producer who has 25 years of data with the Agency will have their average re-calculated using the most current 25 years of individual yield data. The Provincial Probable Yield Benchmark (PPYB) average is calculated yearly and is based on the previous ten years of all yield data as gathered by the Agency on a per crop basis. 7.3 Production Guarantee The Production Guarantee is 60, 70 or 80 percent of the producer s IPY. The producer selects the coverage level when completing the application. The production guarantee is the amount of production which will be covered by insurance or the maximum yield per acre that can be claimed in the event of a total crop loss. Production Guarantees for organic and/or non-traditional cropping practices and/or planting techniques will be adjusted accordingly. 7.4 Price Option Producers must select one of two Price Options for each insured crop. The first option is the pre-harvest Cost of Production unit price and the second option is the Market Price. The Market Price option is calculated using 70 percent of the previous 16

17 five year average as recorded by Statistics Canada and is revised yearly. The producer selects the price option when completing the application (see section 2.2). 7.5 Coverage Value The Coverage Value is calculated by multiplying the Production Guarantee by the Price Option. Coverage values for organic and/or non-traditional cropping practices and/or planting techniques will be adjusted accordingly. 7.6 Total Premium The Total Premium is calculated by multiplying the Coverage Value by the Premium Rate. 7.7 Premium Discount/Surcharge All producers pay the same base rate for AgriInsurance. These rates are calculated by an actuary. However, returning producers to production insurance will have either a Surcharge or Discount applied to their total premium; depending on the producer s past claim history. As of 2013 the Agency offers a loyalty program for producers who enrol on the program annually. Producers will receive a 1% loyalty discount applied against premiums for each year they enrol to a maximum of 10%. For each year they do not enrol they will lose 2% from their loyalty discount. 7.8 Revised Premium The Premium Discount is deducted from the Total Premium to obtain the Revised Premium. It is based on an individual producer s history as it relates to Total Premiums collected by the Agency and the Total Indemnities paid out by the Agency on a per crop basis over the past twenty-five (25) years. The maximum Premium Discount that can be applied to the Total Premium is 50 percent. The Premium Discount does not include the loyalty discount. The loyalty discount would be in addition to the Premium Discount where applicable. The Premium Surcharge is added to the Total Premium to obtain the Revised Premium. It is based on an individual producer s history as it relates to Total Premiums collected by the Agency and the Total Indemnities paid out by the Agency on a per crop basis over the past twenty-five (25) years. The maximum Premium Surcharge that can be applied to the Total Premium is 100 percent. 7.9 Cost Share Arrangements for Premiums The Canada-Newfoundland and Labrador AgriInsurance program is jointly funded by the Federal and Provincial governments. The administration costs are shared between the Federal and Provincial governments on a 60:40 percent basis respectively. Producers are required to pay 40 percent of the premiums in

18 2017. The Federal government s share of premiums is set at a maximum rate of 36 percent of the total premiums, and the Provincial government s share of the total premiums is set at a maximum rate of 24 percent of the total premiums for Producers are required to remit premiums owing for the current insurable year upon completion of acreage measurement and receipt of invoice. Premiums must be received in full at the Corner Brook office by October 31, A late payment fee of $ per month will be charged to overdue accounts and the Producer s name will be added to the government s arrears list. The contract may be considered null and void, meaning that no indemnities will be paid and final claims will not be processed. A producer s claim for indemnity will not be reviewed by the Agency until his/her account is paid in full. At the end of business day on December 31, 2016, all outstanding accounts are forwarded to Provincial Government Collections division and no further late payment fees are applied by the Agency. The file and any related claims awaiting premium payment will be permanently closed and the producer will not be eligible to enrol for AgriInsurance as long as the debt is outstanding Actual Marketable Yield At the time the crop has reached maturity, the Agricultural Inspector will harvest the test plots and grade the crop as either marketable or unmarketable according to vegetable grading standards (see section 10 for grading standard details). The point at which a crop reaches maturity is at the sole discretion of the Agricultural Inspector. The appropriate Crop Yield form is used for each crop and each plot result is recorded. The average of the test plots is calculated and inserted into the following formula to determine the field yield. Yield Formula per Field: [(Test Dig Average Yield (lbs.) x ) / Drill Width (inches)] x Acreage x 2000 ] Example: Test Plot # 1 = 22 lbs. Test Plot # 2 = 10 lbs. Test Plot # 3 = 37 lbs. Test Plot # 4 = 30 lbs lbs. / 4 digs = lbs. per dig Average weight per 10ft. test dig lbs. Drill width 36 inches Field size 1.3 ac. Coefficient Formula: [(24.75 X 26.16)/36] X 1.3 X 2000 = 46,761 lbs 18

19 The crop yield for that field would be 46,761 pounds and this would be added to the other fields of the same crop to determine the Total Actual Yield. The actual yield of this particular crop will be compared to the Guaranteed Production. If the Total Actual Yield is equal to or greater than the Guaranteed Production, then the producer is not in a claim position. If the Total Actual Yield is less than the Guaranteed Production, then the producer may be in a claim situation Indemnity in the Event of a Loss In calculating an indemnity in the event of a crop loss, the actual marketable yield, as determined by sampling is deducted from the established production guarantee. This difference is multiplied by the unit price option to determine the value of the claim. If the difference is zero or negative, there is no claim. Example: A new insured producer insuring a 5 acre potato crop at the 80% coverage level of the market price option set at $0.12/Lb. Guaranteed Production: PPYB x Coverage Level x Acreage 17,024 lbs x 80 per cent x 5 acres 68,096 lbs (marketable potatoes) Coverage: Guaranteed Production x Unit Price Option 68,096 lb x $0.12/lb $8, Actual Yield: 45,988 lbs (based on test dig results) Indemnity: [(Guaranteed Production - Actual Yield) x Unit Price Option] [(68,096 lbs - 45,988 lbs) x $0.12/lb] = $2, TEST PLOTS 8.1 Methodology Used to Place Markers When determining crop yields, it is very important to sample the field in an unbiased manner so that a representative sample is taken. The method the Newfoundland and Labrador Crop Insurance Agency uses to ensure that the procedure is free from bias (i.e. selection of the best/worst areas to be harvested), is representative of the production level, does not interfere with the harvesting of the field by the insured producer and is statistically sound, is described below. 19

20 Selection of area to be harvested: In order to obtain test plots that neither overestimate nor underestimate crop yields, these plots should be placed at equal intervals along a diagonal line across the field. Each plot must be ten (10) feet in length. Four (4) test plots should be taken for each field from one (1) to five (5) acres; more than five (5) acres and less than ten (10) requires six (6) test plots; greater than ten (10) acres requires eight (8) plots. Plots are marked and are set in place early in the season. Insured producers are reminded that they cannot harvest the crop that is contained within these plots or it may cause their contract to become null and void. Insured producers have the option of requesting more test plots if they feel the original placement is not representative of the crop yield. Any new plots would be done in the opposite diagonal. The deadline to request the placement of a second diagonal will be August 31 each year. Given: One 1.3 acre field Length of drills = 500 feet Drill Width = 120 feet Drill width = 36 inches Required: 4 Test Plots Methodology: Divide length of field 500 feet by 5 (number of plots + 1) = 100 feet Divide number of drills 40 by 5 (number of plots + 1) = 8 Note: By adding 1 to the required number of test plots, it eliminates the placement of test plots at the perimeter of the field which are generally not representative. Placement: The 1 st test plot is placed 100 feet down drill # 8. The 2 nd test plot is placed 200 feet down drill #16. The 3 rd test plot is placed 300 feet down drill #24. The 4 th test plot is placed 400 feet down drill #32. 20

21 It is the producer s responsibility to provide the drill width measurement which the Agricultural Inspectors will verify. It is extremely important for the insured producer to provide an accurate measurement as a difference of only 1 inch in the drill width can result in an unrepresentative yield for that particular field. Insured producers have the option of requesting more test plots if they feel the original placement is not representative of the crop yield. Any new plots would be done in the opposite diagonal. The first diagonal of test plots will remain in place and be harvested along with the new ones and the weights averaged for a combined total of the field. The producer must make a request to the Agricultural Inspector for the placement of a second diagonal no later than August 31 st of the insured year. The Agricultural Inspector, as an agent of the Agency, may also decide at any time to place more test plots if they feel the original placement is not representative of the crop yield. 8.2 Significance of Test Plots Remaining Unharvested If insured producers harvest the crop contained within the test plots, their contract may become null and void. Producers should not harvest within the test plots even if they think they are not in a claim position. Problems from the field may not be observed until the crop is being graded to be placed in storage or problems may surface after the crop has been stored or marketed. If this happens the Agricultural Inspector does not have any field data for the Agency to review for a claim. Also, the true measure of harvest is needed to calculate the guaranteed production numbers for subsequent production years. If the producer feels that the test plots will impede the harvesting of the crop, the producer must contact the Agricultural Inspector. The Agricultural Inspector can begin harvesting the test plots either just before or at the same time as the producer s harvest. The Agricultural Inspector may begin harvesting when the crop reaches maturity and will contact and inform the insured producer. This will allow the producer the option of accompanying the Agricultural Inspector when the test plot is harvested and the product is graded to determine the marketable yield. If the producer is unreachable the Agricultural Inspector may proceed with harvesting without the producer to ensure that the crop is harvested at a mature/marketable stage. If the producer harvests what has been designated by the test plot markers throughout the field, the Agency will impose a yield figure for that crop in that field. This figure will be the greater of either the Provincial Probable Yield Benchmark (PPYB) or the Individual Probable Yield (IPY). It will be assumed by the Agency that 21

22 the crop was marketable if harvested. Also, it is the insured producer s responsibility to educate their staff about the test plots. 8.3 Harvesting of Test Plots At the time the crop has reached mature size (Section 10), the Agricultural Inspector will harvest the test plots and grade as either marketable or unmarketable. The appropriate crop yield form is used for each crop and each plot result is recorded. The average of the test plots is calculated and then inserted into the following formula to determine the field yield (see Section 6.10 for an example calculation). Yield Formula per Field: [(Test Dig Average Yield (lbs) X 26.16)/ Drill Width (inches)] X Acreage X 2000 The crop yield for that field would be added to the other fields of the same crop to determine the Total Actual Yield. The actual yield of the particular crop will be compared to the guaranteed production. If the total actual yield is equal to or greater than the guaranteed production, then the client is not in a claim position. If the actual yield is less than the guaranteed production, then the insured producer may be in a claim situation. 8.4 Offsetting Production An insured producer is guaranteed a production level for a crop for the entire farm. This means that individual yields from ALL fields are totalled to reach this guaranteed production. This ensures that both the low risk fields and the high risk fields are insured thus minimizing premium costs to the producer. 9.0 CLAIM PROCESS A meeting of the Crop Insurance Agency takes place annually at the end of the growing season, after all documentation has been processed, to discuss the claims as presented by the Agricultural Inspectors. Initially, the producer is required to notify the Agricultural Inspector if any damage to the crop is observed throughout the growing season. The form that must be completed by the insured producer is a Notice of Crop Damage and Request for Inspection, which is then submitted directly to the Agency or the Agricultural Inspector within 5 days of becoming apparent. The purpose is to notify the Agency that there is damage to the insured crop and outlines specific instructions to the insured producer as to his/her obligations when such damage is discovered. This process may begin at any time throughout the growing season when damage is evident. (There may be cases where neither the field staff nor the insured producer is aware that there is a crop loss until the test plots are harvested. If this occurs, a Notice of Crop Damage and Request for Inspection may not be completed). Upon 22

23 receipt of this form by the Agency, the Agricultural Inspector follows up this notice with the Report on Notice of Crop Damage and Request for Inspection. If there are multiple problems with the crop throughout the season, then a Notice of Crop Damage and Request for Inspection should be completed for each problem. The Report on Notice of Crop Damage and Request for Inspection is completed by the Agricultural Inspector. This report summarizes the damage to the insured crop when notified by the insured producer. The insured producer must sign the form and is given the opportunity to agree or disagree with the Agricultural Inspector s assessment of the crop and its damage. This form should also be substantiated with pictures. The Final Report form follows up the Report on Notice of Crop Damage and Request for Inspection. It contains the dollar amount of the claim that will be submitted to the Agency for its consideration. It allows for the insured producer to agree or disagree with the information contained in this form and provides an opportunity for the producer to provide comments. This form does not guarantee approval of the claim; a disclaimer is present on the form. If there is no claim, then a Final Report is still completed that also contains yields on each crop insured. All documentation is then compiled for all insured producers who are either in a claim situation or disagree with the Agricultural Inspector s yield results. A meeting of the Crop Insurance Agency is held to review all documentation and make decisions on potential claims. The Crop Insurance Agency consists of five members; two vegetable producer representatives, a representative of Agriculture and Agri- Food Canada, a representative of the Forestry and Agrifoods Agency, and the Director of the Agriculture Business Development Division. All board members must vote on each potential claim and a decision of majority must be made. The insured producer will receive a letter, immediately following the meeting, notifying them of the decision. It should be noted that insured producers must pay all outstanding premiums and fees before claims will be reviewed by the Agency. It should also be noted that no indemnity shall be given or paid in respect of, or resulting from: any area that, in the opinion of the Agency, is not properly prepared by the insured person for seeding or planting (e.g. excessive stone, rock or weeds); loss of crop from insect infestation, plant disease or excessive weeds where the insured person fails to implement any program, including crop rotation plans, recommended by the Forestry and Agrifoods Agency in a timely manner for the control of same; the negligence or misconduct of, or application of poor farming practices or standards, by the insured person or employees of the insured person; 23

24 a shortage of labor or machinery or misapplication or improper use of labor, machinery, fertilizer or pesticides by the insured person; failure by the insured person to adhere to planting/harvesting dates as outlined in the Newfoundland and Labrador AgriInsurance Contract; and crop loss due to adverse conditions as a result of a field situated on a flood plain. Under the contract no indemnity shall apply or be paid unless: the total area planted is harvested, or the consent of the Agency is obtained in writing for the abandonment or destruction of the crop or any part of it, or the use of the area planted or any part of it for another purpose, or the total area or any part of it is unable to be harvested by reason of destruction by a designated peril as defined, or the insured person notifies the Agency of any crop loss or damage by a designated peril within 5 days of the damage becoming apparent and on or before the set deadlines. If the insured producer disagrees with the decision, there is an appeal process that can be pursued APPEAL PROCESS An insured producer may file an appeal within fourteen (14) calendar days of the date on the notification from the Agency advising the outcome of their claim. A $100 non-refundable processing fee must accompany the appeal. An appeal is filed by serving the Chairperson of the Crop Insurance Agency, either by hand or by registered mail, with a statement setting out in writing the grounds for the appeal and the specific decision(s) being appealed. The Chairperson of the Agency shall respond to an appeal by serving a written response to the producer appealing within fourteen (14) calendar days of the postage marked date on the producer s appeal letter. 24

25 The Minister Responsible for the Forestry and Agrifoods Agency may appoint an appeal board consisting of three persons, one of whom shall be designated as Chairperson. At least one of the persons appointed shall be a person who is or who has been engaged in the production of an insurable crop. Each member of the appeal board has, in relation to the hearing and determination of a matter, all the powers that are given to a commissioner under the Public Inquiries Act. Subject to the approval of the Minister, the members of the appeal board shall make rules of procedure to govern hearings of the appeal board. A decision of a majority of the members of the appeal board is final and binding. An insured producer who files an appeal and the Chairperson of the Crop Insurance Agency may agree to resolve the dispute by voluntary arbitration on those terms agreed by the parties. When such an agreement is made, no appeal may be made to the appeal board. The decision of the arbitrator is final and binding INSURABLE CROPS 11.1 Potato Eligibility All vegetable producers, regardless of tenure of land, with one or more acres of potatoes planted to certified seed (or 0.5 acres of potato if other crops are also insured), are eligible to make an application for insurance under this plan. The application must be completed by the producer and received by the Agency prior to April 30 of the crop year to which it relates. The Agency will not offer potato coverage on newly cleared land in which a crop has not previously been grown. The potato variety Russet Burbank is not covered under crop insurance due to its need for a long growing season which is not possible in most parts of Newfoundland and Labrador Certified Seed A producer must plant certified seed. If certified class seed is used, its progeny will not be eligible for insurance the following year (certified class seed is seed that has been field planted for seven years). If a producer elects to plant certified seed that is of foundation class or better, then its progeny may be insured for one more year (foundation seed is seed that has been field planted for six years) Perils 25

26 Perils covered are drought, excessive moisture, excessive rainfall, flood, frost, insect infestation, plant disease, wind, rain, hail, snow, wildlife and any other conditions beyond the control of an insured producer, which results in the loss of a crop or part of a crop. The final decision of an uncontrollable natural peril is left to the discretion of the Crop Insurance Agency Blight Blight may be considered an eligible peril only in instances where the insured producer can demonstrate, to the satisfaction of the Agency, that he/she has followed a recommended control program. The best defence that growers have against late potato blight is good cultural practises. Growers can significantly reduce potato crop losses and reduce operating expenses by implementing cultural controls as recommended by the Forestry and Agrifoods Agency. Agricultural Inspectors will be required to review plans for blight for the upcoming year with the producer early in the growing season. The Agricultural Inspectors will also be required to revisit the blight control plan at the time of first inspection to ensure that it is being followed and that the insured producer can verify this with chemical receipts. A claim for blight will only be approved if the producer has followed a regimented spray program developed by the Forestry and Agrifoods Agency. The Agency recommends that producers use clean seeds only and follow the blight control program Crop Year The crop year for the potato plan is defined as the period from May 1 of that year to October 31 of the same year Planting and Harvesting Dates The earliest planting date is May 1 of that crop year. Crops planted prior to May 1 will not be eligible for insurance coverage. The planting deadline is June 30. The last harvesting date is October 31 or at maturity (as determined by Agency staff); whichever occurs first. All deadlines must be strictly adhered to unless a written request is approved by the Agency prior to the deadline. See Section 4.0 for specific requirements for requesting a deadline extension Storage Inspection Deadline Storage losses may be inspected by the Agricultural Inspector if the losses can be attributed to a field-related problem identified throughout the season. The last possible date for storage inspection losses is four weeks after the harvesting deadline, November Coverage The Agency has established three Coverage Levels whereby a producer can insure, on a per crop basis, 60, 70 or 80 percent of his/her average probable yield. The producer can choose from the following unit price levels: 21 /lb for the cost of 26

27 production option and 16 /lb for the market price option. The market price option will be set based on 70 percent of the five (5) year average of the prices reported by Statistics Canada Premiums Premiums are due and payable upon receipt of Schedule D - Certificate of Insurance.. Premiums must be received in full at the Corner Brook office by October 31, A late payment fee of $ per month will be charged to overdue accounts and the Producer s name may be added to the government s arrears list. Contract may be considered null and void Potato Grade Standards Marketable: inches Waste: Product smaller than 1.5 inches, larger than 4.5 inches diameter, or exhibits signs of disease, are soft, have insect damage or any other significant damage or visual impairment (as determined by agency staff) will be graded out Rutabaga Eligibility All vegetable producers, regardless of tenure of land, with one or more acres of Rutabagas (or 0.5 acres of rutanaga if other crops are also insured) are eligible to make an application for insurance under this plan. The application must be completed by the producer and received by the Agency prior to April 30 of the crop year to which it relates Perils Perils covered are drought, excessive moisture, excessive rainfall, flood, frost, insect infestation, plant disease, wind, rain, hail, snow, wildlife and any other conditions beyond the control of an insured producer, which results in the loss of a crop or part of a crop. The final decision of an uncontrollable natural peril is left to the discretion of the Crop Insurance Agency Clubroot Producers will be permitted one clubroot claim on a specific parcel of land and then that land, and any adjoining land, is ineligible for clubroot coverage. If a second claim on the farm occurs on a different parcel of land, the producer will be ineligible for clubroot protection on the entire farm for a period of time to be determined by the Agency. Clubroot may become an insurable peril in the future, at the option of the Agency, if it can be demonstrated to the satisfaction of the Agency that strict 27